Vietnam, Cambodia target US$10 billion bilateral trade in 2022

Both sides officially established diplomatic relations 55 years ago in 1967, marking a new chapter in the relationship and creating momentum to ramp up co-operation, especially in the field of economics and trade. This can be viewed as a bright spot in bilateral relations, thereby contributing to the two countries’ development and prosperity.

Despite facing the negative impact of the COVID-19 pandemic and its ongoing complicated developments since 2020, the two countries have made all-out efforts to cope with the pandemic. As a result, bilateral trade turnover has recorded many impressive results.

According to data provided by the General Department of Vietnam Customs, total two-way trade turnover reached more than US$5 billion in 2020, and over US$9 billion in 2021, with this figure is projected to hit US$10 billion this year.

Cambodian Prime Minister Hun Sen put the sharp increase in trade turnover between the two nations at the height of the COVID-19 pandemic down to the foundation of sound bilateral relations.

During the period affected by the COVID-19 pandemic, Cambodian exports to the nation expanded by more than 300%. Therefore, it can be said that the two economies are complementary for each other.

As a means of further ramping up economic, trade, and investment co-operation, the two governments have agreed to build and implement an open door mechanism for import and export activities, international travel, and labour co-operation. This is along with customs procedures as well as entry and exit and trade regulations, all of which are aimed at facilitating greater investment by businesses in each other's respective markets.

The two sides have also revamped preferential mechanisms and policies for firms in terms of labour training, production and business expansion, investment, and trade promotion by organising forums and fairs, along with diversifying Vietnamese investment activities in Cambodia and vice versa.

Currently, the nation has roughly 190 valid investment projects in Cambodia, with a total registered capital of nearly US$3 billion, duly ranking fifth among countries investing in the neighbouring nation.

The country chooses to primarily invest in the agricultural sector, accounting for nearly 70% of total registered capital, with the rest coming in fields such as finance, banking, insurance, telecommunications, healthcare, construction, tourism and hotels, real estate, and other services.

In contrast, Cambodia currently has 21 investment projects in the nation with total capital of roughly US$64 million.

However, according to Vu Chi Thanh, head of the Economics section of the Vietnamese Embassy in Cambodia, besides these achievements, economic, trade, and investment co-operation between the two countries continue to face certain challenges and difficulties.

For example, there is no clear consensus from the central to the local level on the process of carrying out administrative procedures, while the support and orientations provided for business activities lacks a true connection.

As a means of ensuring the effectiveness of bilateral co-operation moving forward, the two sides need to implement a number of solutions in a bid to further promote economic and trade co-operation, with a particular focus on ensuring the trade of goods, thereby creating favourable conditions for border trade activities. These efforts should serve to intensify business connection activities, he went on to say.

Furthermore, the country should seek to outline a key investment plan in order to turn Cambodia into a manufacturing and raw material supply centre under the 1+1 model to take advantage of its comparative advantages in terms of large land fund as well as the labour resources available in Cambodia.

Efforts should be taken to strengthen the economic connection between provinces bordering the two countries and building bonded warehouses on border gate areas to ensure timely supply of goods.

Moving forward, both sides will continue to promote and constantly improve the efficiency of co-operation in the fields of economics, trade, and investment so as to create new driving forces for the development of each country. This will help step up the comprehensive co-operation between the two sides in a more substantive and effective manner.